Director Tenure and Corporate Misconduct: The Moderating Effect of the Director Network Position

Sen Zeng, Yiqian Huang, Longjun Xiao, Xueyan Jiang, Yanru Li and Cao Yuan ()
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Sen Zeng: School of Management, Wuhan Polytechnic University, Wuhan 430023, China
Yiqian Huang: School of Management, Wuhan Polytechnic University, Wuhan 430023, China
Longjun Xiao: School of Management, Wuhan Polytechnic University, Wuhan 430023, China
Xueyan Jiang: School of Management, Wuhan Polytechnic University, Wuhan 430023, China
Yanru Li: School of Accounting, Zhongnan University of Economics and Law, Wuhan 430073, China
Cao Yuan: School of Mathematics and Computer Science, Wuhan Polytechnic University, Wuhan 430024, China

Sustainability, 2025, vol. 17, issue 3, 1-27

Abstract: This study aims to provide new evidence linking director tenure to corporate misconduct by analyzing the sample of publicly listed companies in China from 2009 to 2022. The findings reveal a significant positive correlation between director tenure and corporate misconduct, which is negatively moderated by director network position. Further analysis shows that both independent and non-independent directors’ tenure increases the likelihood of corporate misconduct, while the centrality of independent and non-independent director networks negatively moderates these corresponding effects. Moreover, external audit quality plays a mediating role in the relationship between director tenure and corporate misconduct. This study elucidates the boundary conditions and mechanisms of corporate misconduct, supporting the management friendliness hypothesis. It offers practical implications for regulators and policymakers to strengthen board governance and audit oversight, thereby contributing to the research on the prevention of corporate misconduct. The limitations of the study include its geographical focus on the Chinese market, suggesting that future research should explore cross-national differences. These findings provide valuable insights for preventing corporate misconduct and promoting corporate sustainability.

Keywords: corporate misconduct; director tenure; director network position; external audit quality; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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